Answer the following statement(s) true (T) or false (F)
1. A rise in absolute prices guarantees that relative prices will rise as well.
2. If the relative price of a gallon of water in terms of milk increases from 1 gallon to 1.5 gallons of milk, then the relative price of milk has fallen.
3. If all absolute prices increase by 10%, then the economy's relative prices will remain unchanged.
4. An increase in the price of gasoline relative to telephones will cause inflation.
5. When silk is shipped from China to Atlanta, transportation costs will make the price of high-quality silk relative to low-quality silk higher in Atlanta than in China
1. False
2. True
3. True
4. False
5. False
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Refer to Figure 2-13. What is the opportunity cost of producing 1 ton of pineapples in Guatemala?
A) 1/2 of a ton of coconuts B) 1 1/3 tons of coconuts C) 2 tons of coconuts D) 180 tons of coconuts
A good is nonrivalrous in consumption if
A. its consumption by one person does not reduce its consumption by others. B. its consumption by one person reduces its consumption by others. C. it is possible, or not prohibitively costly, to exclude someone from receiving the benefits of the good once it has been produced. D. it is impossible, or prohibitively costly, to exclude someone from receiving the benefits of the good once it has been produced. E. a and d